In what is considered as the biggest expose till date on financial dealings, Spain, Australia, France and Russia have started initial enquires after media entities across the globe revealed the details of individuals holding accounts in offshore shell companies in the tax haven of Panama.
Around 11.5 million documents from the law firm Mossack Fonseca in panama revealed chilling details of tax evaders including several politicians and celebrities.
The revelations have left powerful figures from countries including Russia, China, Argentina and Iceland scrambling to explain apparent connections to offshore financial vehicles that look to have been set up to hide assets.
Among those accused are close associates of Russian President Vladimir Putin, relatives of Chinese leader Xi Jinping, Iceland’s Prime Minister Sigmundur David Gunnlaugsson as well as Barcelona striker Lionel Messi.
“We have opened an investigation for money laundering in relation to the law firm” Mossack Fonseca, a judicial source at the National Court, Spain’s top criminal court, told media
Spain initiated the probe after foot ball star Messi and Oscar-winning film director Pedro Almodovar was listed in the Panama leaks. Messi has also been charged with tax fraud in a separate case that is due to go to trial in May.
Australia also launched a probe into 800 wealthy Mossack Fonseca clients. Prosecutors in France and tax authorities in the Netherlands also announced investigations.
The trove of documents, known as the Panama Papers, was anonymously leaked to German daily Sueddeutsche Zeitung and shared with more than 100 media groups by the International Consortium of Investigative Journalists (ICIJ), with more information expected to be released over the coming days and weeks.
The first revelations elicited a chorus of denials, including from the Kremlin, which suggested a US plot after the ICIJ said that banks, companies and close associates of Putin had “secretly shuffled as much as USd 2 billion through banks and shadow companies”.
“Putin, Russia, our country, our stability and the upcoming elections are the main target, specifically to destabilise the situation,” said Kremlin spokesman Dmitry Peskov, adding the reports were likely the work of journalists who were “former officials from the (US) Department of State, the CIA and other special services.”
Offshore financial dealings are not illegal in themselves but may be used to hide assets from tax authorities, launder the proceeds of criminal activities or conceal misappropriated or politically inconvenient wealth.
In United States too, the Justice Department is reviewing the so-called Panama Papers
“We are aware of the reports and are reviewing them, will follow up on wrongdoing or corruption linked to the US ” said Justice Department spokesman Peter Carr.
The leaked documents came from Mossack Fonseca contain the details of the 214,000 offshore entities of individuals more than 35 countries.